From The Detroit Free Press:

The Department of Energy today announced a $730-million loan to Dearborn-based steel maker Severstal North America to help the company invest in the equipment needed to produce of high-strength steel.

Severstal, a manufacturer of advanced carbon steel, will use the DOE loan to modernize its Dearborn facility, creating an estimated 260 new jobs, plus about 2,500 construction jobs associated with the modernization.

Department of Energy Secretary Steven Chu said Severstal’s the light-weight, high-strength steel weight steel helps to reduce the weight and improve fuel efficiency of cars.

“There has been a growing demand for more fuel efficient vehicles and we want these technologies to be made in America,” Chu said today.

Currently, about half of Severstal’s steel goes directly to the Ford, GM, and Chrysler — and the company makes steel used on 23 of Ford’s 24 vehicle platforms.

About a third of the company’s steel goes to suppliers that serve the Detroit Three for use in components of the automakers’ vehicles.

Funding for the program comes from the Advanced Technology Vehicle Manufacturing Loan program.

“Loans and other government support to companies like Severstal are the key to improving the country’s ability to recover from this recession,” said Congressman John Dingell.

Dingell said Republicans are considering cuts to the program which would put other projects that the Department of Energy is evaluating in jeopardy.

Established in 2007, the program provides what have become known as Section 136 loans – so called for the section of the legislation that contained the loan program. The program was bolstered by a $7.5-billion infusion of money in 2008, with the belief that it could help support a maximum $25 billion in loans ultimately.

“There are going to be attempts made to cut the Section 136 funding…and we intend to try to see to it that it stays in place,” Dingell said.

In 2009, Ford received a $6-billion loan to upgrade factories in several states, adding new technology to raise fuel efficiency. Nissan North American received a $1.4-billion loan to retool its plant in Smyrna, Tenn., to make all-electric automobiles and build an advanced manufacturing facility

However Chrysler’s application for a $6 billion loan is still under review.

Chu declined to comment on the status of that application today.

Read this at Freep.com.